1

National Executive Forum on Public Property6th Annual Conference, Vancouver, 9-10 May 2003Making PPPs work – the property profession’s roleLouis Armstrong, RICS Chief Executive

The mark of property professionalism worldwide

2

RICS: representing a global profession

•113,000 members

•120 countries

•50 organised groups, inc. 27 national associations

•15,000 public sector members

3

RICS Canada

• 3 chapters

• 40% of total RICS Americas membership

• Priority for development of the profession

• Energetic leadership

• RICS Awards: VITP on the shortlist

4

Sustainability

• General concept better known

• Johannesburg 2002 – RICS Foundation conference

• Global Alliance for Building Sustainability

• 43 organisations: 1.2 million professionals

• Benchmarking sustainability

• Sustainability and P3s: whole life focus

5

The UK experience

• Private Finance Initiative

• Political issues

• Education sector: 34 projects: 84 in procurement

• Total PFI funding credits (schools) to date of £5.3 billion

• Other sectors

- 25 major hospital schemes

- 7 prisons

- 9 roads

6

National Audit Office Report : PFI Construction Performance

• NAO’s hypothesis: PFI incentivises consortia:

- accurate costing

- on-time delivery

- high quality design and construction

• NAO findings

- price certainty: 22% of projects exceeded budget (73% pre-PFI)

- procuring departments caused changes

- contractors mainly bore extra costs

7

Timing of Delivery

• 28 of 37 projects delivered on time or earlier

• Of 9 delayed, 6 late by <2 months

• Pre-PFI projects: 70% late

• PFI – more detailed specifications

- cost and time targets set later

8

Quality of design and construction

• Most project managers satisfied

• Formal user surveys in only 4 of 37 projects

• OGC/CABE report: any process can secure good

design with client commitment to:

- skills

- budget

- focus on whole life costs

- integrated supply team with quality designer

9

Design benefits

• Health (Nottingham University study)

- lower pulse rates, mean arterial blood pressure

- shortened post-operative stays

- lower drug consumption

• Education (PWC study)

- staff morale

- pupil motivation

- learning time

10

Design benefits

• Recruitment and retention

- work environment often a strong factor

• Value of professional advice for clients

• OGC/CABE recommendations

- appoint a senior design champion

- withhold public funding unless schemes are well enough designed

- use PFI only where it offers best value, taking account of a realistic

Public Sector Comparator reflecting commitment to design

excellence

- publish guidance on involving building users in procurement

11

Conclusions

• UK central government PFI projects: marked

improvement on traditional methods

• Project managers happy with the design quality,

but should consult users more

• Design benefits: greater partnership commitment needed

• Sustainability inherent in P3s: whole life focus

• Professions should develop sustainability indicators

12

Further information, including case studies

Public Private Partnerships Programme:

www.4ps.co.uk

National Audit Office: www.nao.gov.uk

Commission for Architecture and the Built Environment:

www.cabe.org.uk

Office of the Deputy Prime Minister: www.odpm.gov.uk

RICS Foundation: www.rics-foundation.org